Tuesday January 11, 2005 - 20:25:39 GMT
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After yesterdays close in the New York session, Asian buyers were noted as the main driver in the initial move higher from 1.3065 to 1.3110. Into the Asian session much the same was seen from the Asian community, as far as buying Euro and aggressively selling Dollar/Jpy. Euro continued to grind higher in the London trading day and with the ZEW report coming in much better than expected this drove the Euro through stops at 1.3140/50 and put in a 1.3170/73 high. Euro looked poised to continue grinding higher until the ECBís Issing stated ďEurope has already carried too much of the burden of recent foreign exchange adjustments and Asia must do its share, "In terms of foreign exchange developments we see at the European level the adjustment is completed and has even gone too far," this in a speech to a conference on liquidity organized by the Swiss National Bank. This sent Eur/JPY in a tail spin once it got through 1.3625/30 and went for stops at 1.3590/95. The Eur/Jpy continued its slide through 135.90 an put in a bottom at 1.3540/45. Dollar/JPY lagged on the back of this thrashing and once it got through stops at 103.65 it collapsed to session lows of 103.10/15. Traders are starting to wonder what if any water the Dollar rise over the past couple of weeks was nothing more than euphoria into the New Year.
TECHNICALLY SPEAKING The down channel that started 1/7/04 at 105.10 at 12pm and was broken at 103.48 today at 11am has Dollar/Jpy looking a little sick. The ADX is confirming a strong trend with a 39.12 reading. There is support seen at 102.90/00 and resistance at 103.50/60 in the near term.
GAIN AN EDGE We look to sell Dollar/Jpy at 103.55 and 103.70 with a stop above the 104.05 level and a take profit at 102.80/90.
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